Kazakhstan industrialization roadmap 2015 - 2019

November 2013

2

State Program of Accelerated Industrial and Innovative Development (SPAIID) 2015-2019 is the interdepartmental program focused on industrial development

Industrialization concept 2015 – 2019

Sources: Working group analysis

Comments Hierarchy of Strategic Documents

Vision and strategies:

§ National vision – 2050

§ National strategic development plan

§ Concepts reflecting some aspects of the vision

Strategic development directions (examples):

§  Industrial innovation development

§  Infrastructure

§ «Green economy»

§ Foreign policy

§ Security

§ Social development

Authorities’ strategic plans:

§ Strategic plans

§ Action plans

§ Operational plans

Long-term vision - 2050 1

New economic program - 2020 2

SPA

IID 2

015-

2019

Infra

stru

ctur

e

Agr

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ture

Ser

vice

s an

d to

uris

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Edu

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d sc

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e

3

3

Content Industrialization concept 2015 – 2019

Key results and lessons from SPAIID 2010 – 2014

Opportunities and barriers for industrial development of Kazakhstan

Goals, tasks and expected results of SPAIID 2015 – 2019

General approaches, tools and basic principles

System of institutes for development, mechanisms and stages of the Program’s implementation

Key features of the Program for 2015 – 2019

4

The process of diversification of the economy was successfully launched through accelerated development of the manufacturing industry, the increase of non-commodity exports and FDI inflow in non-natural resource sectors

Employment in manufacturing hasn’t decreased despite the negative influence of global financial crisis

Various tools and new policies to support industrial development were successfully piloted

An effective system of institutes for industrial development was created

Major projects, which are significant for the development of national economy, were supported

A more narrow focus and concentration on the limited set of industrial sectors are needed to achieve sustainable results

There is a need to organize adequate financial support for the Program

It is necessary to simplify and improve the efficiency of Program architecture

SPAIID 2010 – 2014 has enabled to start the industrial diversification and overcome the consequences of the global crisis in Kazakhstan

Key results and lessons from SPAIID 2010 – 2014


Key lessons from GPFIIR 2010-2014 Positive strategic changes in the economy and the system of governance

Due to the implementation of the SPAIID 2010-2014 Kazakhstan has already made a significant

progress in the industrial development

Within the next five-year program of industrial development main focus will be made on improving

efficiency

1 1

2

3

4

5

2

3

5

Strengths and weaknesses, opportunities and threats for the development of manufacturing industry of Kazakhstan



Inte

rnal

con

trolla

ble

feat

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E

xter

nal u

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trolla

ble

oppo

rtuni

ties

Positive factors Negative factors

Abundance of the natural resources

Macroeconomic and political stability

High attractiveness for foreign investments due to the access to the market of the Customs Union

Significant results in the creation of a favorable business climate conditions and implementation of the reforms

Successful formation of the system of development institutes for the implementation of industrial policy

Low investment activity in the manufacturing industry

Low availability of human resources of the required qualification

The existence of bottlenecks in infrastructure (transport and logistics, power generation, water supply)

The low level of development of small and medium business with the dominance of state-owned companies

Low level of Kazakhstan’s innovation system

Low efficiency and high energy intensity of Kazakhstan industry

Improving the efficiency and increasing national value added share in the resource sectors

Growing demand of the resource sectors companies in the technical equipment and specialized services

Realizing new market opportunities in Customs Union, WTO, China and Central Asia

Introduction of modern production technologies in the industry

Improving the efficiency of government and quasi-government procurement and procurement of subsoil users

The negative impact of the financial crisis on the development of economy and industry of Kazakhstan

The fluctuations in the global commodity market

Increasing competition from companies from the countries of Customs Union and the WTO in the Kazakhstan market

Structural risks for the economy (Dutch disease and the middle income trap, the employment problem)

Strengths Weaknesses and barriers

Opportunities Threats

1

2

3

4

5

1

2

3

4

5 6

1

2

3

4

5

1

2

3

4

6

Kazakhstan may face serious barriers to the sustainable growth in the long term due to structural changes in its economy



Dutch disease

1

Middle income trap

2

Employment problem

3

Description Consequences

§  Unfavorable conditions for foreign trade

§  High costs for national producers §  Institutional problems

§  Excessive strengthening of the national currency and high costs for business

§  Reduction of the share of the manufacturing industry and increase in the barriers to innovation

§  Internal resistance to reforms

§  The loss of the competitiveness in the sectors that form the basis of the economy

§  The change in the range of the factors determining productivity growth

§  Significant slowdown of the national economy §  A substantial decline in exports and increase in

imports of products of manufacturing industry §  The growth of unemployment (including among

the youth), that can lead to social tensions

§  Working-age population growth §  Labor flow from agriculture layoffs

§  As a result of agriculture layoffs an additional 2.0 to 2.5 million people will enter the labor market

7

§  By 2020, the growth of the Kazakhstan economy can slow

–  As the experience of the economic development of different countries shows, only a few manage to overcome the threshold of average income

–  After World War II, from more than100 countries, only about 10 have quickly overcome the poverty threshold and become high-income countries*

–  Kazakhstan's economy may lose its competitiveness and get into the middle income trap, if active structural reforms are not implemented

Middle-income trap means that Kazakhstan is getting to the level when economic growth is shifted into lower gear


Note: * - including Korea, Ireland, Israel, Singapore, Hong-Kong, Taiwan Sources: World Bank, Working group analysis

Only a few countries managed to escape from the trap of middle income, while maintaining the stable high growth rates Key risks

The

aver

age

per c

apita

GD

P, U

SD

at P

PP

in c

onst

ant p

rices

200

5

High

Low

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

45 000

1980 1985 1990 1995 2000 2005 2010 2015

USA

Turkey

Russia Malaysia

Korea

Kazakhstan

Chile

Brazil

Argentine

Middle income trap

Average GDP per capita, PPP at constant prices 2005, USD

8

Global trends that influence the industrial development, should be taken into account for developing a new industrial policy for Kazakhstan


New role of resources

§ Commodity prices increase § Limited access to resources § Shift of “profit zone” from

manufacturing to resource extraction in the value chain

§ Active integration of new resource-saving technologies

1

Transformation of production chains

§ Suppliers’ specialization increase, diversification and globalization

§ Localisation of production by TNCs § TNCs develop local supply network

and localize production

2

Developing countries role strengthening

§ Population growth in developing countries

§ Increase of demand in developing countries

§ Global companies marketing and innovation strategies adaptation

3

International restrictions

§ Accessing to WTO, regional unions and other trade and customs organisation restrict economic policies

§ Strenghtening economic ties within local and regional trade unions

4

§ Decreasing China’s role as a world manufacturing location

§ Growing competition for a world manufacturing location role between many countries with low cost production

Competition of manufacturing locations

5

Rising role of creativity services in the economy

§ Increasing role of industry-related services with technological sofistication of production

§ Strenghtening role of design and R&D deparments in companies

6

New production technologies development

§ New production technologies development

§ Fully-automated factories due to IT-system introduction

§ Introduction of new materials

7

Rising role of entrepreneurship

§ Rise of SME’s share in the industry § Strengthening the role of

entrepreneurship for new sectors development

8

9

Commodity market fluctuations and the level of integration in the macro region define scenarios of the industrial development of Kazakhstan’s economy


§  High commodity prices provide slow, but stable economic growth

§  Resource-based industries will remain the core of the economy, other sectors won’t get new trigger for growth

§  Moderate economic growth

«Commodity-driven growth»

§  High commodity prices provide stable middle class growth

§  High level of integration in macro region countries leads to export growth and new sectors development

§  Significant economic growth

«Innovative development»

§  Commodity prices fall will limit the current stable source of revenues

§  Economy structure changes with technology-idriven industries rising

§  High level of integration in macro region will provide Kazakhstan with access to new technologies and increase non-commodity exports

«Technology-driven growth»

§  Commodity prices fall leads to economic downturn

§  Social and economic stability are top priority

§  Industry restructures to satisfy local demand

§  Economy stagnation

«Economic crisis»

Hig

h co

mm

odity

pric

es

Low

com

mod

ity p

rices

Low level of macro region integration

High level of macro region integration

Scenario «Economic downturn»

Scenario «Technology-

driven growth»

Scenario «Innovative

development»

Scenario «Commodity-

driven growth»


10

The coming decades expect to see employment growth in Kazakhstan

§  Productivity increase in agriculture will lead to 0,8 mln people employed in the sector losing their jobs

§  More than 1mln people will enter the working age group between 2012-2030

New jobs will be created in industry and services sectors

§  Employment growth in industry and infrastructure will create 300 thousands of new jobs

§  Employment growth in services sectors (tourism, restaurants and hotels, finance and insurance, real estate, education) will create 1,3mln of new jobs


Note: 1 – employment growth in several sectors: providing services,, finance and insurance, real estate sector, education Sources: ILO, UN, World Bank, Working group analysis

Comment

Economically active

population 2030

Have to be employed by 2030

2,3

0,6

Working age population increase

8,7

1,0

Employment growth in services

Employment in agriculture fall

1,3 0,8

Employment increase in

industry and infrastructure

Economically active

population 2012

0,3

0,5

8,5

2,3 mln new jobs have to be created by 2030

New jobs will be created in industry and services

Employment changes in Kazakhstan in 2013-2030

In “Innovative development“ scenario, 2,3 mln of new jobs have to be created by 2030 due to the working age population increase and labor flow from agriculture

11

The Second Five-Year Plan is aimed at accelerated industrial development considering new opportunities created by SPAIID 2010-2014 and lessons learned


Promote diversification and increase industry competitiveness

Program Goal

1.  Increase added value and effectiveness in natural resources processing industries

2.  Accelerate manufacturing development

3.  Improve business climate for industrial development

4.  Establish the basis for the “sectors of the future” development through innovation clusters creation and the development of innovation infrastructure

5.  Support entrepreneurship and SMEs development

Program Objectives

12

SPAIID 2014-2019 would ensure significant impact on improving industrial development and overall economy performance


Notes: productivity equals GVA divided by employment, tons oil equivalent /mln tenge – tons of oil equivalent per 1 mln of value added Sources: Kazakhstan Statistics Agency, Working group model

GVA in manufacturing, tln. tenge

Non-resource (processed) export, bln USD

Energy intensity in manufacturing, tons oil equivalent/mln tenge

Labor productivity in manufacturing, mln tenge per person

Employment in manufacturing, ths. people

+55%

2030F

10,0

2019F

5,3

2012

3,4

71,2

+57%

2030F 2019F

40,0

2012

25,5 2,9

-16%

2030F 2019F

4,4

2012

5,2

+38%

2030F

15,2

2019F

8,8

2012

6,3

656

+12%

2030F 2019F

608

2012

543

13

Policy of industrial and innovative development provides a balanced support for the three groups of industry sectors



Con

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Primary sectors

Market oriented sectors

Innovative sectors

§  Sectors related to extraction and primary processing of natural resources

Cha

ract

eris

tics §  Sectors producing goods to meet

the demand of resource sectors §  Sectors with high potential to

export to the macro-region countries

§  Sectors of the so-called “new economy” which highly depend on R&D progress

§  The key budget income source in the short term in Kazakhstan

§  Macroeconomic stability §  Would not be the growth factor in

the long term

§  The basis for diversification §  Overcoming “the middle income

trap” is the key growth factor in the medium term

§  High level of productivity and high value added

§  Technology development and innovation stimulation – the quality of jobs

§  Key growth factor in the future §  High value added §  Could not solve employment

problems (can provide only 3% employment rate at the most favorable scenario)

Sect

or im

pact

on

econ

omy

deve

lopm

ent

14

In order to pursue new market opportunities the local companies’ expansion to macro region markets needs to be supported



1 level Russian cross-border regions

2 level §  Russia §  Ukraine §  Belarus

3 level Western China

3 level §  Turkey §  Iran §  Iraq §  Azerbaijan

4 level §  China §  Uzbekistan §  Tajikistan §  Turkmenistan §  Kyrgyzstan

«We can use our geographic location advantage as a country located at the crossroads of Europe and Asia… All areas of our trade relations with other countries should be based on transparency

and pragmatism. It also applies to the Customs Union, WTO and Central Asia.» Speech by the President of the Republic of Kazakhstan Nursultan Nazarbayev

“Kazakhstan – 2050: Joining the Club of 30 Most Developed Countries of the World”, Eurasian Emerging Markets Forum, 10.09.2013

High Low

Macro region integration level

1 2

4

3

5

15

As a result of a three-stage selection procedure 41 industrial sector were selected for further analysis


Example: 1 – production of mining equipment refers to the supporting industry for the extraction of metal ores Sources: Working group analysis

Two groups of factors to assess Industrial sectors selection process

The attractiveness of the sector

Competitiveness of Kazakhstan

1.  The market volume of the sector 2.  Market prospects of the sector (for 5-7 years) 3.  The economic impact from the sector’s development

1.  The current level of sector’s development 2.  The quality of the conditions for sector development

Criterion 1. Link of an industry sector to market sectors

Criterion 2. The demand for the products of the industry sector in the domestic market and in the macro-region

Criterion 3. The presence in the Kazakhstan manufacturing of products of the industry sector or industry affiliation to supporting industries of the existing production or mining1

Industrial classifier of economic activities (more than 90 sectors)

Industrial sectors for

further analysis

1

2

16

Under the Program 80% of funding would be provided to the priority industry sectors General approaches, tools and basic principles


Other sectors

Metallurgy 1 1.  Ferrous metals

2.  Non-ferrous metals

Downstream 2 3.  Oil refining

4.  Petrochemicals

Food-processing industry 3 5.  Food manufacturing

Industrial production 5

8.  Automobile manufacturing 9.  Electrical machinery 10.  Agricultural machinery 11.  Railway equipment manufacturing 12.  Mining equipment 13.  Oil production equipment, oil and gas

refining equipment

Chemical industry 4 6.  Agro chemistry 7.  Industrial chemicals manufacturing

Construction materials

production 6 14.  Construction materials production

Priority for other projects’ funding will be determined on the basis of three factors:

Export potential

Productivity

Government support efficiency

Priority sectors

80% 20% §  80% of SPAIID funding would be provided to priority sectors

§  20% of SPAIID funding would be provided to other sectors’ projects

1

2

3

17

Under the policy of industrial and innovative development balanced support for the three types of industry clusters is provided



§  Determined at the national level §  MINT together with authorized

departments and regional administrations work out cluster development strategy and program

§  Key direction of the support – infrastructure development (SEZ)

§  Development tool – specialized Councils

§  Oil and gas processing clusters §  Chemical clusters §  Metallurgy clusters

Clu

ster

s ex

ampl

es

§  Determined through competition §  Local business and local

administration play the key role in cluster development

§  Cluster associations – the most suitable instrument for these clusters development

§  Automotive §  Plastic materials §  Food processing §  Electronic equipment §  Construction materials §  Others

§  Priorities have already been set at the national level

§  Innovation cluster on the basis of Nazarbayev University

§  Innovation cluster on the basis of SEZ PIT “Alatau”

§  Innovation cluster on the basis of Baikonur

Cha

ract

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tics

Con

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National clusters Regional clusters Innovation clusters

18

Competition for the support of regional cluster development projects include several stages and consider the quality of the strategic documents



The support of cluster development projects based on competition

Initiation and clusters’ concepts development

Cluster Associations support

Assisting in the implementation of complex

cluster development programs

§  Grants for cluster concept development and attracting key cluster participants

§  Grants for cluster strategies development

§  Grants for Associations launch

§  Co-financing key cluster development activities:

- Suppliers’ network development

- Specialized infrastructure development

- Human resources development

- Overall export support

- Innovation development

Project selection criteria

1 2 3

Preparatory stage

§  Development of required documents and methodological materials

§  Regional representatives of professional development

0

§  Regional competitive advantages for cluster development

§  Involvement and activity of regional administration

§  Support under the existing programs of industrial authorities’ and institutes for development

§  Involvement of business community

§  Quality of strategic documents

19

Компании Кластеры Отрасли

Companies and promising investment projects will be supported within a framework of SPAIID 2014-2019, system-wide measures will also be implemented


Tool set

Infrastructure

2 §  Infrastructure building §  Infrastructure modernization §  SEZ and industrial parks

Effective regulation

4 §  Road maps for administrative barriers reduction §  Technical regulation §  Tariff regulation

Specialized services

3 §  Special grants (for example, increasing productivity,

technological development and innovation) §  Specialized services (for example, export potential

development) §  Education programs

Access to financing

1 §  Debt financing §  Interest rate subsidies and reimbursement §  Government guarantees §  Financial incentives for large investment projects

Government procurement

5 §  Government procurement for public authorities §  Government procurement for national companies §  Government procurement for companies-subsoil users

Level of tool applicability

Directions of support Support receivers

Companies Region Industries


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§  New infrastructure cost management concept aims to increase Kazakhstan infrastructure competitiveness for industrial consumers, which is essential for accelerated development of the manufacturing industry

§  Infrastructure cost management will be directed at the explicit costs, associated with transport and energy costs, as well as implicit costs, i.e. their quality

§  Medium-term stability of the tariffs will be the key aspect of the new concept

§  New system of infrastructure cost management will create incentives to increase the effectiveness of resource utilization in industry and infrastructure

New infrastructure cost management concept is essential for accelerated development of manufacturing industry



New infrastructure cost management key principles

Key objectives of the new infrastructure cost management concept

1 Ensure tariff competitiveness and stability

2 Increase quality and availability of infrastructure

3 Introduce implementation to facilitate resource effectiveness in industry and infrastructure

21

Well coordinated efforts (both in and outside the sphere of GPFIIR-2) are needed to develop the national innovation system


New age technological policy §  Increase of the technological level of the key companies in

“traditional” industries due to technological programs realization

§  Creation of the industrial centres of excellence §  Introduction of a new portfolio of grants for the technological

problem solving of the key companies using Kazakhstan researchers1

§  Attraction of R&D centres of leading international companies from extractive industries and provision of complex support for their development

§  Increase in quality of technological and innovation management in state-owned enterprises, including corporate venturing

Commercialization policy’s increase of effectiveness П §  Increase of commercialization infrastructure effectiveness

should increase (including centers of technology transfer and business incubators)

§  Development of innovative SMEs §  Foreign start-ups attraction Priority innovative clusters development §  Local infrastructure development in innovative clusters §  Increase in efficiency of clusters’ management companies

Key areas of innovation development in SPAIID-2

Note: 1 - «Demand Driven Grants». In this type of grants companies apply for solution to their technological problems. On the next stage key problems will be chosen on a basis of contest. On the final stage researchers will gain financing to develop solutions to chosen problems

§  Increase of state financing of scientific research

§  Attraction of foreign researchers

§  Complex support of research in priority areas and realization of the target research programs

§  Technological and engineering education revival and new magister programs launch

§  Tender support in development and implementation of the development programs of the leading universities

§  Development and efficiency improvements of the state-owned research institutions

§  Creation of the integrated academic medicine complexes (biotech and medicine research, education and hospitals on a basis of universities)

Reforms in the higher education system and science system management

22

Development of a new complex Talent Management Concept is essential General approaches, tools and basic principles

§  New talent management concept

should provide common centralized vision and realization of foreground objectives in national talent development

§  The most important task is creating of a common vision and coordinating of different public and private organizations in achieving it

§  New talent management concept should include

  Education system modernization

  Retraining of already working population

  Highly qualified migrants attraction

  Creation of effective labor market

Источники: анализ Рабочей группы

Strategy and Coordination

Labor market

1

Education system Retraining and advanced training Migration

2 3 4

5

New Talent Management Concept in Kazakhstan Description

23

SPAIID-2 realization period

5,5 trln tenge have to be invested in the industry development in the next five years to ensure accelerated industrial development of Kazakhstan

Industry can become the point of growth if needed investments are secured

Note: slide shows fixed capital investments for priority sectors Source: Kazakhstan statistics agency, Working group analysis

Biggest investments share has to be invested in refining and petrochemicals

Refining and petrochemicals

Construction materials industry

Food industry

Chemical industry

Machinery manufacturing

2020

1,3

22%

4%

6%

37%

1%

2019

1,2

21%

4%

6%

38%

1%

2018

1,1

20%

4%

6%

38%

1%

2017

1,1

19%

4%

6%

39%

1%

2016

1,1

16%

3%

6%

37%

1%

2015

1,0

16%

3%

6%

38%

1%

2014

0,8

16%

3% 6%

45%

1%

2013

0,5

15%

4% 5%

37%

1%

2012

0,5

30%

10%

7% 4% 1%

Metallurgy 49% 38% 29%

35% 37%

32% 32% 31% 31%

Fixed capital investments structure, trln tenge Fixed capital investments structure for 2015-2019, trln tenge 100% = 5,5 trln tenge


38%

6%4%

19%

33%

1%

Machinery manufacturing

Food industry


Refining and petrochemicals

Metallurgy

Chemical industry

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§  New role of the regions in the industrial development

  Regional authoritieswill have more independency and credentials in decision making concerning region’s industrial development

  Supervision will be based on monitoring of key industrial development indicators

  Social-Entrepreneurship Corporations will be reformed and gain new functions in order to become the Program’s operators

Regional authorities will be responsible for the industrial development of the region in line with its specialization


Sources: Kazakhstan Statistics Agency, Working group analysis

New role of the regions Regional industrial policy development directions

1 Development and implementation of regional socio-economic and industrial strategy

2 Support of priority clusters and realization of key regional projects

3 Provision of modern and competitive infrastructure for industrial enterprises

4 Development of the human capital and education system

5 Foreign investments attraction

6 Support of entrepreneurship stimulus and SMEs development

25

§  The work will be organised at the level of permanent commisisions and industry comittees, which will include businessmen, representatives of key the ministries and development institutes

§  Additional way of ensuring national business interests are special groups of business representatives on different subjects, including, for example, administrative barriers reduction

§  Active participation in the industry counsels and industrial development comission

Kazakhstan business community, including key associations and business leaders will take active part in Program’s development and realization



Business community involvement mechanisms

Five directions of business community participation in creation and realization of industry development programs

1 Active role in decision making on separate projects and initiatives support

2 Participation in roadmap creation of administrative barriers reduction

3 Asessment of business climate quality

4 Assessment of the efficiency of the state support instruments

5 Program realisation monitoring, including assessment of plans and liabilities realisation by state and business

26

New Program’s strategic documents architecture will increase efficiency of the governance, monitoring and control


SPAIID 2015-2019

§  President’s decree

§  President’s decree

§  Government’s resolution

§  Government’s resolution

§  Regional law-making bodies

§  Boards of directors

û

ü

ü

ü

ü

§  Annually (according to the budget cycle)



û Concept

Approving authority Probability of changes

Frequency of changes

Strategic plans and development plans of institutes for development

Program

Action plan

Strategic plans of agencies and

ministries

Territorial development

programs

§  Not until 3 years after the Program launch


27

Industrial development Commission will become key authority on interdepartmental coordination



The Secretariat of the

Commission

Industrial counsels

Industrial development Commission

Industry directions coordination

System directions coordination

§  Highest consulting level chaired by Vice-Premier

Human resources

Infrastructure

Financial resources

Entrepreneurship and SMEs

Competitiveness stimulation

Government procurement

Technologies and innovations

Internationalization

Industrial regulation Mechanical engineering


Mining&smelting

Oil and gas

Chemical industry Food industry

System-wide working groups

§  Decision making level on a base of National institute of industrial development

Commission’s tasks include:

§  Decision making the key program’s points

§  Program’s monitoring and control (monthly, half a year, annually )

§  Interdepartmental coordination §  Ensuring business participation in decision making

§  Program adjustment

28

§  Ensure increase in productivity

§  Support suppliers network development and integration in global value chains

§  Coordinate cluster support policy

§  Develop roadmap to reduce administrative barriers

§  Support of Industrialization map implementation

§  Industrial development commission’s operations support and analytical information provision

§  Analytical support of industrial and innovative development

National institute of industrial development will play a key role in development and implementation of the new industrial policy



Goals of National institute of industrial development National institute of industrial development objectives

§  Economic diversification support and industrial competitiveness increase

§  Realisation of “one window” principle for large and medium companies

§  Support of the Program realisation

29

Second Kazakhstan five-year plan of industrial-innovative development will consist of two stages: preparatory stage and realization stage



Program update 2018 - 2020

Program realization 2016 - 2017

Program launch 2015

Preparations to Program launch 2014

§  Program development §  System of institutes

update §  Consulting process with

business §  Documents preparation §  Preparation of budget

amendments §  Development of

competencies of government employees

§  Industrialization map update

§  Improvement of monitoring system

§  Program launch for roadmap realization

§  5-10 priority national industrial clusters launch

§  3-5 priority regional clusters launch

§  2 innovative clusters launch

§  The first instruments of industrial support launch

§  Launch of enhanced range of instruments

§  Priority clusters, launched in 2015, development

§  5-10 new priority territorial clusters launch

§  Developed clusters formation (national and regional)

§  Updated the 2nd five-year plan of industrial and innovative development

§  New third five-year plan development

Preparatory stage 1

Realization stage 2

30

Key features of the second five-year plan of industrial and innovative development Key features of the Program for 2015-2019

§  Smart diversification – accelerated development of manufacturing industry

New SPAIID 2015-1019

§  Limited set of instruments §  Different set of instruments for three sector groups §  Centralization of project selection procedures for

Industrialization map, increase in effectiveness and transparency

§  Focus on narrow set of industries and national clusters. Flexible approach to industrial priorities through ranking. Competitive selection of regional clusters for receiving state support

§  Support for all clusters members, including foreign companies localizing production in Kazakhstan

§  Creation on the basis of several development institutes unified National institute of industrial development

§  Performance contracts introduction

§  Economy diversification, increase in manufacturing industry share and reduction of oil dependence

SPAIID 2010-1014

§  Wide instruments spectrum for all industries §  Many instruments aren’t used §  Industrialization map is used as an instrument for industrial

development monitoring

§  Fuzzy industry focus, many industrial programs §  Support of Kazakhstan companies only

§  Several departments take responsibility for Program’s realization

§  Some development institutes are also responsible for Program’s realization

§  Cancel of industrial programs §  One unified action plan §  Attention to the elaboration and details of individual events

§  Many industrial programs §  Some actions are undeveloped

§  Active business participation in Program’s development and realization. Effective collaboration with National chamber of entrepreneurs

§  Active participation of regions in Program. Realization of regional industrial development strategies, new role of social-entrepreneur corporations

§  Minimization of business and regions involvement in the Program development

§  Business and regions are executors of the Program

§  Balanced financing model §  Active attraction of private funds for Program realization

§  Program is mainly antirecessionary §  Full-scale financial state support of business

Goal 1

Support receivers

2

Support measures

3

Action plan

4

Realization

5

Roles of business and regions

6

Financing model 7


Kazakhstan industrialization roadmap 2015 - 2019

Business

Transcript of Kazakhstan industrialization roadmap 2015 - 2019